22.09.2021 Author: Dmitry Bokarev

Who Will Get Their Hands on Afghanistan’s Natural Resources?

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Numerous studies of Afghanistan’s subsoil have shown that the country is rich in all kinds of natural resources. Still, despite a large number of mineral deposits, the population’s standard of living is low. Washington’s withdrawal from Afghanistan has altered the balance of power in the country. American companies have had their eye on Afghan resources since 2001, when America sent troops into the long-suffering country. Still, in two decades, not a single organization has started its activities on Afghan territory.

In the early 1960s, Soviet geologists surveyed the land of Afghanistan and mapped the deposits of natural resources. However, the USSR was not interested in the development of Afghan subsoil because, at that time, the country paid much more attention to the development of its own resource industry. Moscow was unwilling to get involved with a politically unstable country that could refuse to cooperate at any stage of interaction. At that time, the Afghan government was balancing between the favors of the USSR and the US and trying to remain neutral.

Shortly after the pro-communist forces came to power in 1978, a war broke out in Afghanistan, in which the Soviet army took part on the side of the government forces. During the fighting, the Soviet military and opposing Mujahideen mined much of the country. Both sides did not think this would make mining difficult for the foreseeable future, as their primary concern was winning the conflict. During the war, the USSR did not exploit Afghanistan’s natural resources because it was too expensive and insecure. After the withdrawal of the military contingent in 1989, Moscow completely abandoned its plans to develop the Afghan primary industry.

The fall of the pro-Soviet government in 1992 plunged Afghanistan into the chaos of civil war. Foreign companies did not even think of commencing mining operations because the state did not exist, and various radical Islamist groups controlled the land of Afghanistan.

After US troops entered Afghanistan in 2001, the USA attempted to provide the conditions for establishing a full-fledged ore mining industry. Using the old Soviet maps, American specialists began to prepare new ones, guided by past experience.

Usually, the main goal of the US military presence in other countries is unimpeded access to natural resources. Afghanistan was no exception. In 10 years, the US Geological Survey has managed to collect about 40 terabytes of data on the country’s natural deposits. Afghanistan became the first country in the world to have its territory virtually 100% probed by hyperspectral imagery, which resulted in the release of more than 60 cutting edge maps by the United States.

Washington announced in 2010 that Afghanistan had almost $1 trillion in mineral wealth in its bowels. However, that estimate may not be correct, as it was given when the global market was recovering from the 2008 financial crisis. Also, the estimate did not consider such resources as gas, oil, and lithium, which is a scarce metal needed to produce increasingly popular electric cars.

During the US military presence in Afghanistan, it was actively supported by sponsors, including the US and its allies, as well as international organizations. However, funds were allocated mainly for strengthening statehood, rebuilding agriculture, energy, and infrastructure. In order to begin effective resource extraction, it was necessary to make the country safe for specialists to work. The Afghan leadership could either seek funding for mining from its own coffers or wait for material assistance from large foreign investors.

US President Joe Biden’s 2021 decision to withdraw the US army from Afghanistan ended Washington’s plans to begin mining Afghan minerals. The US leadership has realized that it lacks the power to control a country whose inhabitants negatively view the American military presence.

India tried to start building a large-scale steel mill in Afghanistan, but these plans collapsed. The project was first postponed due to the high level of terrorist threats. Then it was canceled altogether when Afghanistan was invaded by the Taliban (a movement banned in the Russian Federation) in August 2021. Afghanistan’s Muslims support their co-religionists from Pakistan, which is in conflict with India over the Kashmir province, and have a negative attitude towards the Indians.

It can be assumed that China will show interest in the Afghan resources, but Beijing is in no hurry to enter into negotiations with the Afghan leadership to begin developing the fields. According to a representative of one of China’s largest state corporations, his organization is ready to consider resuming cooperation in the commodities sector once the situation in the country is stabilized and the Taliban regime is recognized internationally, including by the PRC authorities. Afghanistan is a low-priority partner for China because it is easier and cheaper for Beijing to develop resource extraction in the post-Soviet Central Asian countries. First of all, this is because secular governments, officially recognized by the world community, are in power in these states. Possible logistics costs also play a significant role: a large part of Afghanistan’s territory is occupied by mountains, and the Afghan-Chinese border is very short.

At the moment, the export of raw materials from Afghanistan to other countries is illegal. The Taliban extract rubies, emeralds, and lapis lazuli by artisanal mining and panning for gold from water to smuggle the valuable merchandise back to Pakistan.

The future of Afghanistan’s commodities industry is entirely in the hands of the new authorities. If the standard of living in Afghanistan improves and the government succeeds in neutralizing radical groups, foreign investors would be able to come to the country and take up development of mineral resources. If that were to happen, Afghanistan would have the chance to leave its status as one of the poorest countries in the world and join the list of developing countries.

Dmitry Bokarev, political observer, exclusively for the online magazine “New Eastern Outlook”.


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